An interesting debate started this morning on Twitter between Dealer group heads David Langdown (XPD) and Steve Harrop (OFDA). Steve was pressing that the industry should stand up against Amazon and their tax avoidance tactics.
Whilst there is no doubting that Amazon have a ‘creative’ approach to how they pay tax which allows them to pay less, it is not why Amazon are successful. The key to Amazon’s success is in their customer experience. Don’t get me wrong, good pricing is no doubt a part of that, but a company the size of Amazon could and would still be successful even if they paid higher tax than UK SME’s.
Ask yourself what the last thing you bought on Amazon was. Then ask why you bought it from Amazon? Was it because they came up first on the search engine? or emailed you about it? or because you know you always find great stuff on Amazon?… When you went to checkout the last item you bought did you pause and check the web for a better price? I doubt you did. The reason you’re buying from Amazon is because you know you get what you want when you want it how you want it.
The conversation I presume stemmed from the concern that Amazon who have a wide range of Office Products for sale on their platform are a major threat to office products dealers. That is a fair concern and one that should be clear for anyone to see. What is not seen as clearly by dealers is why they are a threat. A majority of comments I hear from inside the industry suggest that Amazon is a threat because they are selling at a low cost.
“So what should dealers do? Stand by and let Amazon take over?” No of course not. Dealers should embrace Amazon the very same way that the book industry has.
If you look back 10-15 years ago the book industry was going through the same pains the office products industry currently is. Amazon was the big bad wolf that was coming to eat their lunch. They tried (and failed) to stand up against Amazon and those that exhausted their energy doing so are no longer around to tell the tale (Borders).
Today Amazon has a thriving book industry within its platform. Independent book sellers have a platform to sell books online that ensure traffic directly to them. They just have to get 2 things right: Price and the Service. Amazon does the rest.
My opinion is that the office products industry should save their energy going up against Amazon and use it to improve the industries approach to Amazon. For a start lets empower the industry to ensure their product data is of a calibre worthy of Amazons criteria. Then lets create a need for a software provider to create a platform for dealers to manage their Amazon business. Outside of the office products industry there are hundreds of these platforms. So who’s going to make the step to bring one in?